QuickBooks Interview Questions & Answers

Question 1. Explain What Is Quickbooks?

Answer :

QuickBooks is an accounting software package developed by Intuit. It provides and on-premise accounting applications as well as cloud-based versions, which includes business payments, payroll functions and manage and pay bills.

Question 2. What Are The Products Available In Quickbooks?

Answer :

QuickBooks provide following products:

• QuickBooks Self-employee
• QuickBooks Online
• QuickBooks Pro
• QuickBooks Premier
• QuickBook Enterprise
• Customer Reviews
• Upgrade your QuickBooks

Question 3. Mention What Are The New Features Available In Quickbooks 2015?

Answer :

The QuickBooks 2015 provides following features:

Insight tab in the Home window: This tab highlights company’s financial status and activity by different colors. Green bar represents monthly income, blue bars indicate your monthly expenses and black graphs indicates your profit by month

Income tracker upgrades: This colored boxes helps to track the number of open invoices, overdue invoices, and a recent customer payment. It also displays a box for unbilled time and expenses

Update reminders window: Reminder window displays to-dos and transaction that are due as of today

Pinned notes: Note associated with a customer, vendor or employee can be pinned and every time you select the subject, it will also display the note associated with it

New report formatting: The new reports view makes it much easier to read. The rows for top level categories are shaded gray, lower level category are shaded beige and totals are shaded light gray.

Question 4. Does A Self-employed Version Of Quickbooks Calculate Tax On Your Income?

Answer :

Yes, self-employed version calculate tax on your income and the payment of tax is quarterly federal estimated tax.

Question 5. Explain What Happens If You Don’t Pay The Estimated Tax Or Miss The Tax Payment?

Answer :

You are liable to a penalty which is very nominal; you need to pay around 6-8% annually on your tax. For example, you owed $100 in taxes and missed the quarterly tax payment then you need to pay $8 in penalties at the year’s end.

Question 6. How Can You Manually Add An Income Or Spending Transactions In Quickbooks Self-employed?

Answer :

In QuickBooks Self-employed, you can manually add transactions by following steps

• Click transactions from the left navigation
• On the right side, above the list of transactions, click add transactions
• Enter the details for the transactions, select a category and then click save.

Question 7. Why Quickbooks Self-employed Need User’s Bank Login Information?

Answer :

QuickBooks self-employed requires user bank login information to establish a secure connection with the bank or Credit Card Company.  The bank login credentials are stored in a separate database using multi-layered software and hardware encryption.

Question 8. Explain How Can You Secure Your Quickbooks Self-employed Account?

Answer :

• Don’t share your QuickBooks self-employed password with anyone
• Make sure your password is strong
• Make sure you have virus protection and a firewall on any computer you use to access QuickBooks
• Don’t install programs from people or companies you don’t know.

Question 9. What Does Accountant Reports Show In Quickbooks?

Answer :

Accountant Reports in QuickBooks include

• Account Listing
• Trial Balance
• Profit and Loss statement
• Transactions detail by account
• Recent automatic transactions
• Cash flow statement
• Transaction list by date

Question 10. Mention The Main Features Of Quickbooks Documents?

Answer :

Features of QuickBooks Document include:

• Attorney drafted template
• E-sign to legalize your documents
• Sync with QuickBooks online
• Secure file storage- Stored with SSL encryption

Question 11. Explain How Can You Set A Reminder For Your Overdue Invoices In Quickbooks?

Answer :

• Choose Company, Reminders and then click the Set Preferences tab
• Choose the “My Preferences tab”, and then click the “Show Reminders List”, when opening a company file on my preference tab
• Click the Company Preferences tab, and select “Show List” for overdue invoices
• Enter the number to be notified for overdue invoices before they reach their due date

Question 12. Mention What Are The Reconciliation Reports Include?

Answer :

Journal: This reports break down every transaction during a period of time into debits and credits and display them chronologically

Balance Sheet: It list out what you own (assets), what your debts (liabilities) and what you have invested in your company (equity)

General Ledger: For each account the report shows all the transactions that occurred in that account over a period of time. ( beginning balance and total for each account)

Transaction list with splits: This report list each transaction with its associated split lines

Scorecard: It compares your sales growth, profitability, and cash flow to other companies in your industry

Recent Transactions: It shows the transactions made recently within last 4 days

Question 13. Explain How Quickbooks Can Be Helpful In Managing Products And Inventory?

Answer :

Inventory valuation summary: It summarizes key information such as quantity on hand, value and average cost for each inventory item

Purchases by product or service detail: Groups your purchases by the items in your product or service list

Sales by product or service detail: List sales for each item on your service or product like date, transaction type, rate, quantity, total and amount

Inventory valuation detail: Lists the transactions that each inventory item is linked to and shows how the transactions affected quantity on hand, value and cost

Sales by product or service summary: It summarizes sales for each item on your service or product; it includes amount, quantity, percentage of sales and average price.

Question 14. Explain How To Delete Journal Entries In Quickbooks?

Answer :

To delete journal entries in QuickBooks, follow the step:

• Click “Company” in the upper menu and select “Make Journal ”
• Click the “Previous” or “Next” until the journal entry you want to delete appears on the screen
• Select the “Edit” option in the upper menu and select “Delete General ”

Question 15. Explain How To Check For Duplicate Invoice Or Sales Receipt In Quickbooks?

Answer :

To check for duplicate sales (invoice, sales receipt, etc.) numbers:

• Select Transactions -> Sales
• Click the number column to sort it
• When the sales populate, it toggles the numbers in ascending and descending order
• Check for duplicates

Question 16. Explain How To Produce Recurring Invoices In Quickbooks?

Answer :

To produce recurring invoices in Quickbooks follow the following steps:

• Select Gear (Company Profile button) Under list menu select -> Recurring Transactions -> New
• For transaction type, select invoice and then click OK
• For Type, select scheduled
• Select e-mail address to send emails automatically
• Complete the rest of the form and then click save template
• Repeat the steps for each customer, you would like to create a recurring invoice

Question 17. Explain How To Import Files In Quickbooks?

Answer :

Quickbooks uses .IIF (Intuit Interchange Format) format which is an ASCII text, CSV files to import/export lists and to import transactions.  Converting files into .IIF file is little complex, if it is feasible try to enter the journal entry or transaction directly into the Quickbooks.

Question 18. What Are The Differences Between Items And Accounts?

Answer :

Items: products and services that you sell. They are used on transactions such as invoices and purchase orders. All items must point to an account.

Accounts: categories in which financial transactions are organized into reports, such as profit & loss and balance sheet. Some accounts carry balances such as accounts receivable and accounts payable; some accounts report information over a period of time, such as income and expenses.

Question 19. What Are The Two Primary Reports In Quickbooks (financial Statements)?

Answer :

Profit & loss (or income statement) and the balance sheet.

Question 20. What Is The Difference Between Accrual And Cash Basis?

Answer :

Accrual represents financial transactions and activities as they occur, such as rent expenses that always exists every month and are recorded whether they are paid or not. Only in Accrual basis, you will have accounts payable, accounts receivable, prepaid expense asset and customer deposit liabilities when there is a difference the time the transaction happens and the time that the actual payment is made.

Cash basis will only report income and expenses as they are paid.

Question 21. What Is The Difference Between Entering A Bill (and Bill Payment) And Writing A Check?

Answer :

Entering a bill is to incur an expense the moment it exists and it’s paid in the future (Accounts Payable).  Write Check is to record an expense at the same time it is being paid, no time difference between date of the expense and date of payment.  You must use the Pay Bills feature in QuickBooks to mark the Bill (Accounts Payable) paid, using the write check feature would potentially duplicate the expense and overstate your liabilities.

Question 22. What Is The Undeposited Funds Account?

Answer :

The temporary account that QuickBooks uses when a payment is received from a client but not deposited in the bank (QuickBooks bank register) yet.

Question 23. What Are The Steps To Take To Accept A Customer’s Payment And Record It In The Bank?

Answer :

Two Steps: Click of “receive payments” and select client and invoice to apply payment to… this will increase your “undeposited funds” account. Then click on Record Deposit after it is taken to the bank and record all payments that are being deposited together in a single transaction to match the bank.

Question 24. What Do You Look For When “analyzing” Financial Reports?

Answer :

Consistency: Such as expenses that are expected to repeat every month and Income matching the business activities.

Common Sense: do the numbers make sense or are the numbers expected.  Generally, there should be no negative numbers unless there is a refund you are aware of.

Trends and Relationships: such as sales going down or expenses going up.  Also the percentage of direct costs vs. revenue, etc…

Question 25. What Is A Sub-account? And Why Would You Use It?

Answer :

A sub account is an account that belongs to a main or a parent account and is used to create additional categories (or details) within a main category, for example, Lodging and Airfare are sub-accounts of Travel expense.

Question 26. What Does The Collapse And Expand Button Do On Standard Reports?

Answer :

It shows or hides sub accounts.

Question 27. What Is The Difference Between “profit And Loss Report” And The “balance Sheet Report”?

Answer :

P&L shows activities: income and expenses to arrive to Net Income (Profit) for a specific time period.

Balance Sheet shows values: Assets and Liabilities to arrive to Equity (Net Worth) as of an specific date.

The Net income from the Profit & Loss pass through the equity section in the balance sheet.

Question 28. How Do You Get Quickbooks Financial Reports To Excel? And Why Would You Do That?

Answer :

Open any report, click on “Excel” button and then create new worksheet. You must have Excel installed in your computer.

You would export to excel to be able to manipulate the numbers, search for data, statistical analysis, creating graphs.

Question 29. When Reconciling A Bank Account, Where Does The Value Of The “beginning Balance” Come From? Where Does The “ending Balance” Come From?

Answer :

Beginning balance comes from bank statement and it is also last month’s reconciled balance.  The ending balance comes from bank statement, and equals the total amount of cleared transactions.

Question 30. What Is The Purpose Of Reconciling The Bank Account? What Are You Supposed To Do With The Transactions That Did Not Reconcile?

Answer :

By reconciling you make sure that all transactions that went through the bank are also present in your accounting system.  Cash transactions that did not flow through the bank cannot be reconciled using bank statements. Items not reconciled are either pending for the following month or, if they are a mistake or duplicated, they must be deleted.

Question 31. What Is The Difference Between Cost Of Goods Sold And Operating Expenses?

Answer :

Cost of goods sold are directly attributed to a sale, they only exist because the sale exists, such as the cost of inventory sold, sub-contractor expense.  A total sale minus cogs is used to calculate gross margin or gross profit.

Operating expenses usually are not directly correlated to a sale and are fixed, such as rent and utilities.

Question 32. How Do You Program Quickbooks To Repeat A Recurring Transaction?

Answer :

Memorize Reports: (CRT+M) Automate Transaction Entry will create automatically the transaction in the future.

Question 33. How Is The Memo Text Box In Bills, Invoices, Checks, Etc. Useful For Report Filtering And Transaction Research?

Answer :

You can “tag” a transaction with a code, you can search notes within transactions.

Question 34. What Are Classes In Quickbooks And How Would You Use Them?

Answer :

They are used to create departments or cost centers to measure profits and less for each class.

Question 35. What Challenges And/or Issues Can Come Across When Using Classes.. Especially On A Balance Sheet By Class?

Answer :

Unclassified transactions. Balance sheet by class can have issues with unclassified or unbalanced transactions.

Question 36. What Report Or Function Allows You To View Transactions That Were Changed, Modified, Or Deleted After Bank Reconciliation Has Been Done?

Answer :

Reconciliation discrepancy report in the reports, banking menu.

Question 37. How Would You “fix” A Customer Deposit That Was Entered As Income Straight Into The Register, But Then You Realized That The Invoice Belonging To That Deposit To Still Shows An Open Balance?

Answer :

Change the deposit to use the account “accounts receivable” OR delete deposit and use the “receive payment/Record Deposit” workflow.

Question 38. What Financial Reports Should You Prepare At The End Of The Year In Order To Prepare For Tax Preparation Or Other Types Of Financial Reporting?

Answer :

Profit & Loss, balance sheet A/R Aging, A/P Aging, Inventory Valuation Summary, sales by rep, Profit by job, etc..

Question 39. What Is The Difference Between A Custom Summary Report And A Custom Transaction Detail Report?

Answer :

Summary: Contains totals for a customer or vendor / totals for a particular account

Detail: Line by line, transaction by transaction, Itemized transaction.

Question 40. In Your Own Words, What Does It Mean To Be An “advanced Quickbooks User”?

Answer :

Create custom reports, be proactive to potential users understanding difference between different versions of QuickBooks, knowing how to describe reports, search and find information and confidence to work with multiple QuickBooks files.

Question 41. What Tools Are Available To “figure Out” Quickbooks Issues… In Other Words Where Can You Go For Answers For Questions On How To Do Certain Things In Quickbooks?

Answer :

QB Help menu, user guide, search intuit support website, videos in YouTube, tutorials on the web, email trusty accountant, Hector’s Bog, and “google” the question at hand.

Question 42. What Does It Mean When You Have Negative Inventory? What Can You To Do Troubleshoot Inventory Issues?

Answer :

Selling inventory you don’t have.  Troubleshoot inventory by pulling a “quick report” on the particular item & looking at all the times the inventory came in or out to find discrepancy.

Question 43. What Is The Purpose Of Using A Sales Order, Instead Of An Invoice?

Answer :

Sales order record a sale approved by client but not affect inventory or accounting, Invoice is to finalize sales once the product/service has been delivered.  A Sales Order can create a “backorder” which lets you sell what you do not have, but commits that inventory to that cistomer when it arrives instead of showing as “available for sale”.

Question 44. You Are Setting Up A Quickbooks File From Scratch For A Company That Has Been Open For Many Years, How Do You Handle Opening Balances Of Assets And Liabilities? How Should You Enter A/r Or A/p Opening Balances?

Answer :

Enter a journal entry for all balance sheet items using last year’s tax return or financial statement prepared by accountant.  Also the opening balances could be created when new accounts are created in the Chart of Accounts

For Inventory Items, they must be entered with beginning balances as they are created in QuickBooks using the item list.

A/R & A/P must be entered by creating customers or vendors with an opening balance.

Question 45. What Are The Most Important Quickbooks Tips For A Beginner And To Speed Up The Work?

Answer :

Check the date: wrong dates give you the wrong reports, always.

Use Tab instead of Enter: Enter tends to do the opposite of what you want.

Home Page: use the home page when lost to find what you are looking for.

Respect Accounting: accounting rules such as revenue recognition and expenses matching allow for better understanding the reports.

Shortcuts: speed up data entry process, especially with dates.  Always reconcile accounts and get rid of unreconciled (often duplicate) transactions.

Question 46. Why Is Quickbooks Used In Such A Different Way By Tax Preparers Versus A Quickbooks User Doing Bookkeeping / Managing A Business?

Answer :

Tax preparers and people that input data once per year just enter deposits and expenses and do not deal with Accounts Payable or Accounts Receivable which means they are working on “cash basis”. Where QuickBooks users doing bookkeeping typically enter day-to-day transactions and deal with open invoices (A/R) and open bills (A/P) which means they are working on “accrual basis”

Question 47. What Are The Most Important Accounting Topics To Learn And Have In Mind In Order To Understand The Work Being Performed In Quickbooks?

Answer :

Accounting Principles: Consistency such as seeing the same expenses monthly on the reports, Direct/Variable Costs go into COGS and Indirect/Fixed Costs go into expenses, Revenue Recognition such as having a consistent policy on Invoice dates driven by delivery date or service completion date, Expense Matching such as making sure that expenses follow the income even if they are not paid by creating the Bills on the correct dates, Comparability such as being able to compare this month with last year’s same month.

Question 48. What Are The Main Differences Between Quickbooks Pro And Premier?

Answer :

Things that Premier does, but Pro doesn’t:  can do Sales Orders (Backorders), can create P.O.’s straight from Estimates or Sales Order, Create Change Orders, Industry Specific Reports (Wholesale & Manufacturer, Retail, Non-Profit, Professional Services, Contractor), Inventory Center.

Question 49. What Does Quickbooks Enterprise Have That The Other Versions Do Not?

Answer :

Enterprise can have from 5 to 30 users, individual user access per area, can handle unlimited amount of items vs. 14500 max with Pro/Premier, more powerful inventory features, works much faster in a network multi-user environment.

Question 50. You Notice That Multiple Accounts Should Actually Be Sub Accounts. How Can You Quickly Make These Accounts Sub Accounts Of Another Account?

Answer :

Click on the diamond to the left of the account, drag it below the appropriate parent account, and release the mouse button. Then click on the diamond again, drag it to the right, and release the mouse button.